Best Judgement Assessment under GST

Last Update Date : October 04, 2018

assessment under gst

When it comes to best judgement assessment, an assessing officer conducts his assessment based on his reasoning and the information at his disposal. It is made either ex-parte or by rejecting the plea or accounts of the concerned assessee.  In such cases no records or documents are furnished and claims are not substantiated. Records and evidence produced before the proper officer are rejected, whether wholly or partly, due to unreliability, incorrectness or incompleteness.

What is Assessment under GST?

“Assessment” means the process of determining the tax liability under GST Act, 2017. It includes various type of assessment like:

  • Self-assessment
  • Re-assessment
  • Provisional assessment
  • Summary assessment
  • Best judgment assessment

There are 2 parts to best judgement assessment:

  • Assessment of non-filers: Any registered person who is liable to file return but fails to do so falls under this category.
  • Assessment of unregistered persons: Any person who is liable to register under GST but fails to do so falls under this category.

Let’s understand best judgement assessment in case of unregistered persons first:

Best Judgement Assessment of Unregistered Person

There are two cases in which the best judgement assessment of an unregistered person can be undertaken by the proper officer under section 29(2):

  • It can happen if a taxable person fails to apply for registration under GST despite being liable to do the same or
  • It can also be done if a taxable person’s registration was cancelled by the proper officer under section 29(2). The proper officer shall assess the tax liability of the person during the period for which he/she remains unregistered.

The order to conduct best judgement assessment shall be passed:

  • After the proper officer serves a show cause notice which gives the person an opportunity to be heard
  • Such an order can be passed within 5 years from the due date for filing of the annual return of the relevant financial year to which the unpaid tax relates.

Best Judgement Assessment of Non-filers

In case of non-filers, the best judgement assessment can be initiated if the registered taxable person fails to file any of the below mentioned returns (which are applicable to him considering the business structure and transactions):

  • The monthly return for a normal taxable person (except SMEs & composite dealers);
  • The quarterly return for a person opting for composition scheme;
  • The monthly return for a person deducting tax at source;
  • The monthly return in case of an Input Service Distributor;
  • The return for a non-resident which is required to be filed within the time frame specified u/s 39(5) of the CGST Act
  • The final return in case a person who was liable to file the return but has applied for cancellation of his registration

Then, the proper officer shall first issue notice u/s 46 of the CGST Act requiring the registered taxable person to furnish the return within a period of 15 days.

If, even after issuing such notice u/s 46, the registered taxable person fails to furnish the return, the proper officer may issue the order to the best of his judgement within a period of 5 years from the due date of the annual return for that particular year to which the tax not paid relates.

Withdrawal of Best Judgement Assessment Order

Where the registered person furnishes a valid return within thirty days of the service of the assessment order issued above, the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of section 50 (not exceeding 18%) or for payment of late fee under section 47(Levy of late fee) shall continue.

Provisions on Return Filed After the Issue of Best Judgement Assessment

Where the registered person furnishes the valid return within 30 days from date of issue of Best Judgement Assessment order- the assessment order shall be deemed to have been withdrawn but the person shall be required to pay interest and penalty thereupon, according to the provisions relevant to such payment.

Provisional Attachment of Property in Case of Best Judgement Assessment

Please note that in both the cases where the order of Best Judgement Assessment is passed by the proper officer and the proceedings for the same are underway, the commissioner, if he is of the opinion that, for the purpose of protecting the interest of the government revenue, it is necessary so to do, he may, by order in writing provisionally attach any property, including bank account belonging to the taxable person.

Summary of Best Judgement Assessment

Non-filers

Unregistered persons

Steps:

1.    A registered taxable person liable to file return fails to do so.

2.    The proper officer issues a notice to him u/s 46

3.    The proper officer waits for 15 days from the date of issue of notice

4.    After the expiry of above-mentioned period, the officer may conduct best judgement assessment

Steps:

1.    A taxable person liable to register, fails to do so

2.    The proper officer may choose to conduct assessment

3.    The officer issues an assessment order within a period of five years from the due date for filing of the annual return for the year to which the tax not paid relates.

 

GST Form

GST ASMT – 15 Form is issued by the proper officer to issue an order of assessment made under Best Judgement Assessment.

We hope that this guide has helped you understand how and when the best judgement assessment under GST is conducted.

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